Damian Lillard can now sign supermax extension -- but what is that?

When it was officially announced earlier today that Damian Lillard was named to the all-NBA second team, it meant a financial windfall to the Trail Blazer point guard. He is now eligible to sign a supermax contract extension with the team.

There are three ways to qualify for a supermax contract extension and only a player who has (or will have) completed eight years of NBA service by the end of his current contract is eligible to sign a supermax deal, which can only be offered by the team that drafted him or traded for his rookie contract:

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Be named to an All-NBA team in the most recent season or both seasons before it.

Or, be named NBA Defensive Player of the Year in the most recent season or both seasons before it.

Or, be named NBA MVP in any of the three previous seasons.

The supermax is officially called the "Designated Veteran Player Extension." The provision allows teams to re-sign qualified players to maximum five-year contracts worth up to 35 percent of the salary cap with eight percent escalation in each subsequent year. Lillard still has two seasons (at approximately $62 million) left on his existing contract so the supermax would not kick in until that deal runs its course.

But when it does, he'll qualify for 35 percent of the cap. Those four seasons are estimated to pay Lillard in the neighborhood of $190 million, and it could be higher, depending on the size of the cap. The team and Lillard have confirmed what Yahoo.com's Chris Haynes reported earlier this week – that Lillard is going to be offered and will sign the deal when it is allowed to be extended, after July 1.

This contract provision was added so that small-market teams would have a financial advantage in holding onto their best players. The team's salary cap will not be affected until the supermax kicks in, so the Trail Blazers will have more roster flexibility over the next two seasons than they will later.

Lillard is the face of this franchise as much as any Trail Blazers has ever been. He's a leader, too, who keeps the team's culture focused and a man who does more than his share in the community.